GFX Morning Commentary July 31st 2013

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is 1.0250-1.0350

Today’s expected range for the Canadian Dollar against the Euro is 1.03620-1.3700

Today’s expected range for the Canadian Dollar against Sterling is 1.5620-1.5700

The US Dollar is unchanged against the Euro and Sterling and a bit weaker against the Yen and some other currencies, currency markets are settling in ahead if the US Federal Reserve interest rate announcement this afternoon. With no chance of a change in interest rates financial markets will be watching to see if Bernanke gives any hint of an announcement of the tapering of the Fed’s stimulus program. Given that just two weeks ago he said there would be no change to the program until the economic statistics warrant a change, I think there is little chance that he will announce any changes to the program but if he does then you will see the US Dollar jump much higher.

In Europe this morning the economy received some important data, in Europe the economy created jobs for the first time since 2011 but this was offset by a decline in Retail Sales in Germany. The EU economy created 24K new jobs last month, I hope this is the start of a new trend as unemployment still tops 19% and youth unemployment is still off the charts in the region.

The Canadian Dollar has traded a bit weaker over the course of the last 24 hours as the Canadian market gets set up for the Bernanke announcement later today. I think the breakup of the Potash Cartel has weighed a bit on the Loonie, I have heard reports that the drop in Potash prices could knock as much as 0.5% off the Canadian GDP but that will need to be played out.

Ahead of the Bernanke announcement today we do get the Canadian GDP report for May and the US 1^st Quarter GDP report. In the US we are expecting a growth rate of 1.0% and in Canada we are looking for a monthly growth rate for 0.3% so we may see some fireworks early this morning surrounding these releases. I think volatility will start to ramp up now as we have more Central Bank data ahead of the US Employment report on Friday, make sure you have your orders in ahead of today’s announcement to take advantage of the volatility

 

Have a great day

Mike

GFX Morning Currency Rates
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0293			1.0273
CAD/USD		0.9715			0.9734
EUR/USD		1.3254			1.3269
EUR/CAD		1.3642			1.3629
STG/CAD		1.5644			1.573
AUD/CAD		0.9298			0.9312
CAD/JPY		94.89			95.59
CAD/CHF		0.902			0.9052
CAD/HKD		7.5133			7.5488
CAD/CNY		5.9515			5.6993
CAD/MXN		5.5915
Commodities
Gold		$1,330.00			$1,322.42
OIL		$103.25			$103.81
US DOLLAR INDEX
P.CLOSE		81.93			81.8
OPEN		81.93			81.85
US 10YR YIELD		2.60%			2.60%